An Investigation into the Determinants of Financial Reporting Quality in Family-Owned Enterprises

Posted: Mar 16, 2025

• Matthew Sanchez
• Matthew Smith
• Matthew Torres

Abstract

Family-owned enterprises represent a substantial portion of the global economy, contributing significantly to employment, innovation, and economic stability across diverse markets. Despite their economic importance, the determinants of financial reporting quality in these organizations remain inadequately understood through conventional accounting frameworks. Traditional research has predominantly focused on publicly traded corporations with dispersed ownership structures, largely neglecting the unique characteristics of family-controlled entities. This research gap is particularly problematic given the distinctive governance dynamics, succession considerations, and socioemotional wealth objectives that characterize family enterprises. The present investigation addresses this scholarly void through an innovative methodological approach that transcends traditional accounting paradigms. We propose that financial reporting quality in family-owned enterprises cannot be adequately explained by conventional determinants alone, but requires consideration of family-specific factors including intergenerational transfer intentions, family relationship dynamics, and socioemotional wealth preservation strategies. Our research introduces a novel analytical framework that integrates computational linguistics with behavioral economics to assess reporting quality through both quantitative metrics and qualitative narrative analysis.